WESTINGHOUSE ARRANGES FINANCING FOR CBS BID

Chemical Bank and J.P. Morgan have each committed $1B to
Westinghouse Electric's pending bid for CBS Inc., "a sign that
financing could be lined up for the expected $5 billion
transaction," according to sources familiar with the situation
(Lipin/Shapiro, WALL STREET JOURNAL, 7/19). The N.Y. TIMES cites
a source who says that "an offer might come within the next week
and that the Westinghouse board was solidly behind its chairman,
Michael H. Jordan, in favoring [the] acquisition" (Geraldine
Fabrikant, N.Y. TIMES, 7/19). Most articles note Westinghouse's
existing $3.4B in debt as an obstacle to any deal. The L.A.
TIMES notes that Standard & Poor's might consider downgarding
both companies' credit ratings if they agree to merge (Sallie
Hofmeister, L.A. TIMES, 7/19). NatWest Securities analyst
Nicholas Heymann: "You could easily create another Time Warner -
- a big thing buried under a load of debt that can't go anywhere"
(David Lieberman, USA TODAY, 7/19). However, several industry
sources say the "real logic of the deal" is that it "would a
create the largest TV and radio group in the nation, with signals
that reach about one-third of all households. A combined CBS-
Westinghouse would own stations in seven of the 10 largest
markets in the country -- far more than NBC, ABC or Fox (Paul
Farhi, WASHINGTON POST, 7/19).
WATCHING AND WAITING: The emergence of Westinghouse could
"jump-start an auction for CBS" among the following players: Ted
Turner, Barry Diller, Seagram's CEO Edgar Bronfman, and ITT Corp.
(WASHINGTON POST, 7/19). The WALL STREET JOURNAL reports that
Group W (Westinghouse's broadcasting arm) would take on a
partner, with Seagram's, Chris-Craft, Turner and Disney
mentioned. A spokesperson for ITT said their "plate is full,"
and people close to Barry Diller said his interest in CBS "has
ended" (WALL STREET JOURNAL, 7/19). Turner, as quoted by SAN
DIEGO UNION-TRIBUNE TV writer John Freeman on a visit to the West
Coast last week: "Man, I go to bed and I wake up in the middle
of the night, gritting my teeth and in a cold sweat. I beat the
bed with my fists and I say, 'I gotta get me a network!'" (INSIDE
MEDIA ONLINE, 7/17).
EXISTING RELATIONSHIP: Group W and CBS have already
launched their joint "single network sales representation firm,"
CBS/Group W Television Sales. All CBS reps will join the new
firm as employees of Westinghouse, with separate teams serving
the CBS and Group W stations and a third team serving those co-
owned by both (INSIDE MEDIA ONLINE, 7/17).